The government is seeking to grant the Energy and Petroleum Regulatory Authority (EPRA) the formal mandate to regulate crude oil, as captured in proposed amendments to the law.
The Statute Law (Miscellaneous Amendments) Bill, 2023 seeks to amend the Energy Act of 2019, providing EPRA with the necessary legal backing to become the regulator of Kenya's upstream oil sector.
This regulatory shift comes at a crucial juncture, as the nation strives to sustain its aspirations of becoming an oil producer.
The Bill specifically mandates, "Delete the words 'except crude oil' appearing in paragraph (a) (ii)." Currently, the Energy Act empowers EPRAt to regulate various aspects of the petroleum industry, excluding crude oil, and governs the electrical energy sector, with exceptions for nuclear facility licensing.
EPRA Director-General Daniel Kiptoo, in a statement to a local daily, emphasized the corrective nature of the amendment.
"We already regulate crude oil. This is just regularizing an error that occurred when there were amendments to the Petroleum and Energy Bills during the debate in 2019 before they were passed into law," Kiptoo said.
The genesis of EPRA's exclusion from crude oil regulation dates back to the Petroleum (Exploration, Production and Development) Bill of 2017, which proposed the establishment of the Upstream Petroleum Regulatory Authority (UPRA) for the specific regulation of crude oil.
Despite the removal of UPRA in the final Petroleum Act, the upstream role was not transferred to EPRA, the successor to the Energy Regulatory Commission.
The current amendment seeks to rectify this oversight, providing the much-needed legal foundation for EPRA's ongoing oversight of the crude oil sector.
This development holds particular significance as EPRA has been instrumental in granting oil exploration licenses to companies exploring crude oil and gas in various offshore and onshore oil blocks across the country.
As the energy regulator continues to play a pivotal role in the industry, the amendment not only solidifies its authority but also raises the possibility of adjustments in fuel prices, given its expanded regulatory powers in the oil sector.